FansUnite Sees Revenues Grow In 2022 Amid Balance Sheet Weakness

FansUnite Entertainment (TSX: FANS) last night reported its fiscal 2022 financial results, posting revenues for the year of $27.3 million, an improvement over the $5.6 million reported in the prior year.

“We are pleased to report significant year-over-year revenue growth in Fiscal 2022, as highlighted by our total revenue of $27.30 million, an increase of 387% as compared to the last fiscal year while operating at a gross margin of 54%,” commented CEO Scott Burton.

Despite the improvement in revenue, the end appears to be near for the company, with margins amounting to $14.8 million, while selling, general and administrative expenses totaled $52.9 million.

Of those expenses of $52.9 million, the largest expense when further broken down was amortization of intangible assets at $21.1 million, followed by salaries and wages of $14.4 million, and general and administrative expenses of $4.6 million.

After an operating loss of $38.1 million, losses widened further from $11.0 million in interest expenses and impairments of $71.7 million, which was partially offset by $60.6 million in revaluations on contingent consideration, leading to a net loss for the year of $61.3 million.

The firm has meanwhile also seen a decline in balance sheet strength, with cash and cash equivalents falling to $2.9 million as of December 31, down from $14.0 million as of the end of 2021. Total current assets declined from $22.3 million to just $8.9 million.

Accounts payable meanwhile amounted to $4.5 million as of the year end, while bank indebtedness hit $8.2 million, with total current liabilities sitting at $25.2 million.

The firms cash position however was bolstered by a $3.0 million financing conducted in mid-March, with Tekkorp Capital and company management contributing a total $1.4 million under the financing. The firm this morning also announced that it would reduce the exercise price of 14.7 million outstanding warrants from $0.14 to $0.12 in an effort to raise further funds.

FansUnite last traded at $0.075 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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